Auction of brands and trademarks of Kingfisher Airlines (KFA) turned out to be a damp squib on Saturday as lenders failed to attract a single bidder for sale of these pledged assets at a reserve price of Rs 366.70 crore in their efforts to recover unpaid loans from beleaguered Vijay Mallya.
This is the second failed attempt by the 17-bank consortium, led by state-run behemoth State Bank of India (SBI), to recover some money from Mallya, after an earlier auction of Kingfisher House – the erstwhile headquarters of the long-defunct airline – met with a similar fate, with no bidder coming forward.
Items on sale
The items on sale during Saturday’s e-auction included the the Kingfisher logo as also the once-famous tagline ‘Fly the Good Times’. The other trademarks on sale included Flying Models, Funliner, Fly Kingfisher and Flying Bird Device.
The reserve price for the trademarks was kept at Rs 366.70 crore, which is not even one-tenth of the price at which it was pledged as a collateral for the loan. Sources, however, said the reserve price was “too high” for any bidder to come in.
“There were no bids, possibly because the reserve price was considered very high. Though the reserve price was set much lower than its original valuation at the time of taking the brand as collateral, people still found it to be high,” a banking source said.
Auction lasted only for an hour
The online auction began at 11:30 am and lasted for an hour without any success. It was conducted by SBICAP Trustee Company on behalf of lenders under the Sarfaesi Act. The Kingfisher brand itself was valued at over Rs 4,000 crore by Grant Thornton when the airline was at its peak.
In a previous attempt at recovery of dues, which have ballooned to over Rs 9,000 crore after taking into account the interest component, the banks had conducted an auction of Kingfisher House last month, but did not find any takers at a reserve price of Rs 150 crore.
Sources said that the lenders might now try to lower the reserve price in both the cases in their future efforts to sell these pledged assets.